Jack Dorsey Cuts 40% of Block Workforce as AI Becomes Primary Driver of Corporate Efficiency

Block, the technology company behind Square, Cash App, and Afterpay, has announced a surprising round of mass redundancies affecting 40% of its workforce. The drastic measure comes as the company increasingly relies on artificial intelligence tools to manage its operations.

In a letter to shareholders, founder Jack Dorsey revealed that the company will eliminate more than 4,000 employees, reducing its total workforce to below 6,000 people. Dorsey believes most other companies will follow suit in the near future.

The decision reflects a broader trend in the technology sector, where companies are restructuring to integrate AI systems. Dorsey argues that smaller teams equipped with artificial intelligence tools can deliver superior results and greater productivity.

“A much smaller team, using the tools we built, can do more and do it better. And the capabilities of these intelligence tools continue to grow faster every week,” Dorsey wrote.

Block’s Chief Financial Officer, Amrita Ahuja, echoed this sentiment, describing the shift as a major opportunity for the company to accelerate its operations. She noted that AI enables the automation of many tasks previously performed by larger teams of talented employees.

Despite the significant workforce reduction, Dorsey assured stakeholders that Block’s business remains in robust health. Through a post on platform X, he emphasised that the company’s gross profit continues to grow. He characterised the redundancies as a proactive structural change rather than a reactive response to financial pressure.

“I believe most companies are behind. Over the next year, I’m confident the majority of companies will reach the same conclusion and make similar structural changes. I’d rather do it honestly and our own way than be forced to do it reactively,” the former Twitter CEO stated.

Block’s move reflects a broader post-pandemic phenomenon in the technology sector. Companies including Amazon, Meta, and Microsoft have implemented massive redundancies over the past year. Block itself experienced significant workforce expansion—from approximately 3,800 employees in 2019 to over 10,000 before this announcement—and is now seeking to return to more efficient staffing levels closer to pre-pandemic numbers.

For affected employees, Dorsey pledged severance compensation of 20 weeks or more depending on tenure, equity rights through May, and health insurance coverage for six months. Additionally, departing staff may retain company devices and receive an additional payment of US$5,000.

Market reaction to the announcement has been decidedly positive. Block’s share price surged 24% following the public disclosure of the AI-driven restructuring plan.

Dorsey accepted responsibility for the situation faced by all employees, acknowledging he expanded the company too rapidly and apologising for the circumstances. As a co-founder of Twitter and close associate of Musk, speculation about Dorsey’s potential return to the CEO position at Twitter has intensified.